HELSINKI (Reuters) – A European Central Bank (ECB) rate cut in June could be called into question if a geopolitical shock causes energy prices and inflation to rebound, the Governing Council member said on Tuesday of the institution, Olli Rehn.
The ECB opened the door to a rate cut in June during its latest monetary policy meeting, but Olli Rehn stressed that a slowdown in inflation was the precondition for such a move.
This decision “assumes that there are no other setbacks (on inflation), for example in the geopolitical situation and therefore in energy prices,” he said in a statement.
While some members of the ECB Governing Council are already calling for a second cut after June, Olli Rehn recalled that the central bank remained dependent on data.
“The ECB makes its interest rate decisions meeting after meeting, in light of the latest information, without committing to a specific interest rate,” he said.
(Reporting Anne Kauranen in Helsinki, Corentin Chappron, edited by Blandine Hénault)
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